U.S. Sen. Ron Wyden says Canada is tipping the scales for its lumber companies by undercharging them for publicly-owned timber.
As a result, the Oregon Democrat says, Canadian companies have an unfair advantage over U.S. lumber producers — especially in the Northwest.
But Canadian leaders disagree. The two countries have fought over the issue for decades. They’re currently renegotiating a 2006 agreement that expired last year.
Wyden and other senators are pushing for the U.S. to negotiate a new trade deal with Canada that will level the playing field – likely by putting tariffs on Canadian lumber. And if negotiations fail, they say, the U.S. should charge Canada for unfairly traded imports.
“Canada has for decades failed to play by the rules when it comes to softwood lumber,” Wyden said. “These lumber subsidies are keeping our industry from creating more jobs and growing to the fullest potential.”
The 2006 agreement required Canada to impose taxes and restrictions on lumber exports to the U.S. but stopped the U.S. from collecting anti-dumping duties from Canadian lumber companies. It also ended years of litigation and prevents U.S. lumber companies from filing another trade dispute until October of this year.
Wyden says the 2006 deal “had too many holes in it,” and the next agreement needs to have a “quantitative restriction” on the amount of Canadian lumber exported to the U.S.
“Obviously, an agreement would be our first choice,” Wyden said. “But if the negotiators can’t get a deal that gives us a chance to compete fairly so our industry can grow, we’re going to insist on full enforcement of U.S. trade laws against subsidized Canadian lumber.”
In a letter to U.S. Trade Representative Michael Froman last month, Wyden and 24 other U.S. senators outlined their support for a deal that will “offset the harmful effects of subsidized Canadian lumber.” In addition to Wyden, the letter was signed by Oregon Sen. Jeff Merkley, and Washington Sen. Patty Murray, both fellow Democrats, and Idaho Republican Sens. Mike Crapo and James Risch.
If the two countries can’t reach a deal, the letter warned, the U.S. is prepared to make sure trade laws are “fully enforced against unfairly traded imports, including softwood lumber.”
Canadian Ambassador David MacNaughton fired back at the senators in a letter to Wyden, according to a news report by The Canadian Press. In it, he accused the group of using “inflated rhetoric” and “mischaracterizations.”
MacNaughton argued legal challenges and investigations over the past 35 years have failed to find an adverse impact from Canada’s lumber policies, and he wrote “a successful negotiation is not guaranteed."
Wyden said the U.S. lumber industry is preparing to file a trade case in October if negotiations fail.
“We’ve got 30 mills in our state that are following this very closely,” Wyden said. “My view is our workers and our businesses can compete with anybody on the planet when there is a level playing field.”